Contents - 882_.pdfCorporate Information 2 Business Structure 3 Condensed Consolidated Income...
Transcript of Contents - 882_.pdfCorporate Information 2 Business Structure 3 Condensed Consolidated Income...
Corporate Information 2
Business Structure 3
Condensed Consolidated Income Statement 5
Condensed Consolidated Statement of Comprehensive Income 6
Condensed Consolidated Balance Sheet 7
Condensed Consolidated Statement of Changes in Equity 9
Condensed Consolidated Statement of Cash Flows 11
Notes to the Condensed Consolidated Financial Statements 12
Management Discussion and Analysis 28
Other Information 33
Report on Review of Condensed Consolidated Financial Statements 41
Contents
Tianjin Development Holdings Limited | Interim Report 20122
Corporate InformationBOARD OF DIRECTORS
Executive DirectorsMr. Yu Rumin (Chairman)
Mr. Wu Xuemin (General Manager)
Mr. Dai Yan
Mr. Bai Zhisheng
Mr. Zhang Wenli
Mr. Wang Zhiyong
Dr. Wang Weidong
Non-Executive DirectorsMr. Cheung Wing Yui, Edward
Dr. Chan Ching Har, Eliza
Independent Non-Executive DirectorsDr. Cheng Hon Kwan
Mr. Mak Kwai Wing, Alexander
Ms. Ng Yi Kum, Estella
COMPANY SECRETARY
Mr. Tuen Kong, Simon
AUTHORIZED REPRESENTATIVES
Mr. Wu Xuemin
Mr. Tuen Kong, Simon
INDEPENDENT AUDITOR
Deloitte Touche Tohmatsu
SOLICITOR
Woo, Kwan, Lee & Lo
REGISTERED OFFICE
Suites 7–13, 36th Floor
China Merchants Tower
Shun Tak Centre
168-200 Connaught Road Central
Hong Kong
Telephone : (852) 2162 8888
Facsimile : (852) 2311 0896
E-mail : [email protected]
SHARE REGISTRAR AND TRANSFER OFFICE
Tricor Tengis Limited
26th Floor, Tesbury Centre
28 Queen’s Road East
Wanchai
Hong Kong
STOCK CODE
882.HK
PRINCIPAL BANKERS
CITIC Bank International Limited
DBS Bank Ltd., Hong Kong Branch
Industrial and Commercial Bank of
China (Asia) Limited
Hang Seng Bank Limited
Credit Agricole Corporate and
Investment Bank
Tianjin Development Holdings Limited | Interim Report 20123
Business Structure
TIANJIN DEVELOPMENT HOLDINGS LIMITED
Utilities
Electricity Water
Heat and Thermal Power
Hotels
Courtyard by Marriot Hong Kong Hotel Property in Tianjin
Strategic and Other Investments
Dynasty Fine Wines (828.HK) Tianjin Port (3382.HK)
Presses Elevators and Escalators
Tianjin Development Holdings Limited | Interim Report 20124
Business StructureUTILITIES
Company Name Shareholding Principal Activities
Tianjin TEDA Tsinlien Electric Power Co., Ltd. 94.36% Distribution of electricity in TEDA
Tianjin TEDA Tsinlien Water Supply Co., Ltd. 91.41% Distribution of water in TEDA
Tianjin TEDA Tsinlien Heat & Power Co., Ltd. 90.94% Distribution of steam in TEDA
HOTELS
Company Name Shareholding Principal Activities
Tsinlien Realty Limited 100% Operation of Courtyard by Marriott Hong Kong
Tianjin First Hotel Ltd. 75% Possession of hotel property in Tianjin
STRATEGIC AND OTHER INVESTMENTS
Company Name Shareholding Principal Activities
Dynasty Fine Wines Group Limited 44.70% Produce and sale of winery products
Tianjin Port Development Holdings Limited 21% Provision of port services in Tianjin
Tianjin Tianduan Press Co., Ltd. 18.06% Manufacture and sale of presses and mechanical equipments
Otis Elevator (China) Investment Company Limited 16.55% Manufacture and sale of elevators and escalators
note: The above percentages represent effective equity interest in respective companies or group of companies.
Tianjin Development Holdings Limited | Interim Report 20125
Condensed Consolidated Income StatementSix months ended 30 June
2012 2011HK$’000 HK$’000
Notes (unaudited) (unaudited)
Revenue 4 1,918,506 1,703,808
Cost of sales (1,779,445) (1,596,332)
Gross profit 139,061 107,476
Other income 5 80,179 47,400
Other gains, net 6 54,869 23,991
General and administrative expenses (215,341) (194,217)
Other operating expenses (28,566) (16,140)
Finance costs (31,432) (11,168)
Share of profit (loss) of
Associates 265,230 349,922
Jointly controlled entities 193 (1,654)
Profit before tax 264,193 305,610
Tax expense 7 (37,401) (48,063)
Profit for the period 8 226,792 257,547
Attributable to:
Owners of the Company 200,860 219,181
Non-controlling interests 25,932 38,366
226,792 257,547
HK cents HK cents
Earnings per share 9
Basic 18.82 20.53
Diluted 18.79 20.52
Tianjin Development Holdings Limited | Interim Report 20126
Condensed Consolidated Statement of Comprehensive IncomeSix months ended 30 June
2012 2011HK$’000 HK$’000
Note (unaudited) (unaudited)
Profit for the period 226,792 257,547
Other comprehensive (loss) income:
Currency translation differences
— Group (28,839) 96,726
— associates (11,858) 85,462
— jointly controlled entities (82) 378Change in fair value of available-for-sale
financial assets 13(a) 4,962 (34,733)Share of other comprehensive gain (loss) of
an associate
— available-for-sale revaluation reserve 2,771 (2,324)
Total comprehensive income for the period 193,746 403,056
Attributable to:
Owners of the Company 170,803 351,775
Non-controlling interests 22,943 51,281
193,746 403,056
Tianjin Development Holdings Limited | Interim Report 20127
Condensed Consolidated Balance Sheet30 June
201231 December
2011HK$’000 HK$’000
Notes (unaudited) (audited)
ASSETS
Non-current assets
Property, plant and equipment 11 1,772,157 1,685,553
Land use rights 273,294 278,151
Investment properties 11 195,328 134,335
Interest in associates 12 5,466,695 5,239,421
Interest in jointly controlled entities 16,770 16,660
Deferred tax assets 99,876 100,051
Available-for-sale financial assets 13 213,483 208,595Deposit paid for acquisition of property,
plant and equipment 5,767 57,429
8,043,370 7,720,195
Current assets
Inventories 2,420 3,178
Amounts due from jointly controlled entities 14,508 14,580
Amount due from ultimate holding company 1,249 1,198
Amounts due from related companies 16,588 15,740
Trade receivables 14 569,842 593,999
Other receivables, deposits and prepayments 14 289,019 305,246
Available-for-sale financial assets 13 — 36,991
Financial assets at fair value through profit or loss 15 69,689 338,708
Entrusted deposits 16 1,873,431 1,638,768
Restricted bank balance 7,730 3,083
Time deposits with maturity over three months 684,565 809,174
Cash and cash equivalents 3,102,668 2,950,873
6,631,709 6,711,538
Total assets 14,675,079 14,431,733
Tianjin Development Holdings Limited | Interim Report 20128
Condensed Consolidated Balance Sheet30 June
201231 December
2011HK$’000 HK$’000
Notes (unaudited) (audited)
EQUITY
Owners of the Company
Share capital 106,747 106,747
Reserves 9,653,091 9,482,322
9,759,838 9,589,069
Non-controlling interests 615,879 592,936
Total equity 10,375,717 10,182,005
LIABILITIES
Non-current liabilities
Bank borrowings 17 1,990,500 1,987,500
Deferred tax liabilities 81,991 76,056
2,072,491 2,063,556
Current liabilities
Trade payables 18 449,168 379,035
Notes payable 25,767 9,458
Other payables and accruals 984,164 1,069,121
Amounts due to related companies 215,685 194,836
Amounts due to non-controlling interests 97,771 97,489
Bank borrowings 17 397,545 362,514
Current tax liabilities 56,771 73,719
2,226,871 2,186,172
Total liabilities 4,299,362 4,249,728
Total equity and liabilities 14,675,079 14,431,733
Net current assets 4,404,838 4,525,366
Total assets less current liabilities 12,448,208 12,245,561
Tianjin Development Holdings Limited | Interim Report 20129
Condensed Consolidated Statement of Changes in EquityFor the six months ended 30 June 2012
Owners of the Company
Share
capital
Other
reserves
Retained
earnings Sub-total
Non-
controlling
interests Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 January 2012 (audited) 106,747 7,322,980 2,159,342 9,589,069 592,936 10,182,005
Profit for the period — — 200,860 200,860 25,932 226,792
Other comprehensive (loss) income:
Currency translation differences
— Group — (25,850) — (25,850) (2,989) (28,839)
— associates — (11,858) — (11,858) — (11,858)
— jointly controlled entities — (82) — (82) — (82)
Change in fair value of available-
for-sale financial assets — 4,962 — 4,962 — 4,962
Share of other comprehensive gain
of an associate
— available-for-sale revaluation
reserve — 2,771 — 2,771 — 2,771
Total comprehensive (loss) income for
the period — (30,057) 200,860 170,803 22,943 193,746
Share-based payment by an associate — (34) — (34) — (34)
Transfer between reserves — 5,139 (5,139) — — —
Transfer upon lapse of share options — (4,986) 4,986 — — —
— 119 (153) (34) — (34)
At 30 June 2012 (unaudited) 106,747 7,293,042 2,360,049 9,759,838 615,879 10,375,717
Tianjin Development Holdings Limited | Interim Report 201210
Condensed Consolidated Statement of Changes in EquityFor the six months ended 30 June 2011
Owners of the Company
Share
capital
Other
reserves
Retained
earnings Sub-total
Non-
controlling
interests Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
At 1 January 2011 (audited) 106,747 7,007,988 1,766,521 8,881,256 525,477 9,406,733
Profit for the period — — 219,181 219,181 38,366 257,547
Other comprehensive income (loss):
Currency translation differences
— Group — 83,811 — 83,811 12,915 96,726
— associates — 85,462 — 85,462 — 85,462
— jointly controlled entities — 378 — 378 — 378
Change in fair value of available-
for-sale financial assets — (34,733) — (34,733) — (34,733)
Share of other comprehensive loss
of an associate
— available-for-sale revaluation
reserve — (2,324) — (2,324) — (2,324)
Total comprehensive income for the
period — 132,594 219,181 351,775 51,281 403,056
Capital contributions from
non-controlling interests — — — — 20,929 20,929
Share-based payment by associates — 66 — 66 — 66
Transfer between reserves — 3,984 (3,984) — — —
Transfer upon lapse of share options — (3,078) 3,078 — — —
— 972 (906) 66 20,929 20,995
At 30 June 2011 (unaudited) 106,747 7,141,554 1,984,796 9,233,097 597,687 9,830,784
Tianjin Development Holdings Limited | Interim Report 201211
Condensed Consolidated Statement of Cash FlowsSix months ended 30 June
2012 2011HK$’000 HK$’000
(Unaudited) (Unaudited)
Net cash from operating activities 177,681 310,662Net cash used in investing activities (54,566) (303,988)Net cash from (used in) financing activities 36,901 (96,581)
Net increase (decrease) in cash and cash equivalents 160,016 (89,907)Cash and cash equivalents at 1 January 2,950,873 2,523,326Effect of foreign exchange rate changes (8,221) 64,727
Cash and cash equivalents at 30 June 3,102,668 2,498,146
Tianjin Development Holdings Limited | Interim Report 201212
Notes to the Condensed Consolidated Financial Statements 1. BASIS OF PREPARATION
The condensed consolidated financial statements have been prepared in accordance with
Hong Kong Accounting Standard (“HKAS“) 34 Interim Financial Reporting issued by the
Hong Kong Institute of Certified Public Accountants (“HKICPA”) as well as the applicable
disclosure requirements of Appendix 16 to the Rules Governing the Listing of Securities on
The Stock Exchange of Hong Kong Limited (the “Stock Exchange”).
2. SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost
basis except for certain financial instruments and investment properties, which are measured
at fair values as appropriate.
The accounting policies and methods of computation used in the condensed consolidated
financial statements for the six months ended 30 June 2012 are the same as those followed
in the preparation of the Group’s annual financial statements for the year ended 31
December 2011 except that in the current period, the Group has applied, for the first time,
certain amendments to Hong Kong Financial Reporting Standards (“HKFRSs”) issued by the
HKICPA that are mandatorily effective for the current period.
The Group has applied the amendments to HKAS 12 Deferred Tax: Recovery of Underlying
Assets in the current period. Under the amendments to HKAS 12, investment properties
that are measured using the fair value model in accordance with HKAS 40 Investment
Property are presumed to be recovered through sale for the purpose of measuring deferred
taxes, unless the presumption is rebutted in certain circumstances. The Group measures
its investment properties using the fair value model. As a result of the application of the
amendments to HKAS 12, the directors reviewed the Group’s investment property portfolios
and concluded that the presumption set out in the amendments to HKAS 12 is rebutted
because the criteria to rebut set out in the amendments to HKAS 12 were considered
satisfied. Accordingly, the application of the amendments has had no material effect on the
amounts reported in these condensed consolidated financial statements and the entire
carrying amount of the investment properties continue to be recovered through use.
The application of other amendments to HKFRSs in the current period has had no material
effect on the amounts reported in these condensed consolidated financial statements and/
or disclosures set out in these condensed consolidated financial statements.
Tianjin Development Holdings Limited | Interim Report 201213
Notes to the Condensed Consolidated Financial Statements 3. CRITICAL ACCOUNTING JUDGEMENT
Estimates and judgements used are continually evaluated and are based on historical
experience and other factors, including expectations of future events that are believed to
be reasonable under the circumstances. Other than those disclosed in the annual financial
statements for the year ended 31 December 2011, the judgement and the key source of
estimation uncertainty that have a significant risk of causing a material adjustment to the
amounts recognized in the condensed consolidated financial statements are discussed
below:
On 2 March 2011, the Group was informed by the Finance Bureau of Tianjin Economic and
Technological Development Area (the “TEDA Finance Bureau”) that the basis of calculating
the supplemental income to be granted by the TEDA Finance Bureau to the utility businesses
of the Group would be a lump sum to be negotiated between the Group and the TEDA
Finance Bureau on an annual basis effective from the year of 2010. As the amount of such
supplemental income will only be agreed and known after the end of the financial year, for
the purpose of these condensed consolidated financial statements, the Group, after
discussion with the TEDA Finance Bureau, has accrued an amount of such supplemental
income for the six months ended 30 June 2012 (“Interim Accrual”) based on management’s
assessment of the current governmental, fiscal and economic policies in the Tianjin Economic
and Technological Development Area (“TEDA”) and with reference to the Group’s operating
results in this segment. While the directors are of the opinion that the Interim Accrual is
reasonable and the best estimate of the Group’s entitlement having been taking all relevant
factors into account, it may be different from the actual amount that will be finally determined
and agreed with the TEDA Finance Bureau and subsequent adjustment may be necessary.
Tianjin Development Holdings Limited | Interim Report 201214
Notes to the Condensed Consolidated Financial Statements 4. SEGMENT INFORMATION
The Group determines its operating segments based on the reports that are used to make
strategic decisions and reviewed by the chief operating decision-makers. The chief operating
decision-makers assess the performance of the operating segments based on a measure
of profit after tax.
The Group has five reportable segments. The segments are managed separately as each
business offers different products and services. The following summary describes the
operations in each of the Group’s reportable segments.
(a) Utilities
This segment derives revenue from distribution of electricity, water, heat and thermal power
to industrial, commercial and residential customers in TEDA, the People’s Republic of China
(“PRC”).
(b) Hotels
This segment derives revenue from operation of hotels in Hong Kong and Tianjin.
(c) Winery
The result of this segment is contributed by a listed associate of the Group, Dynasty Fine
Wines Group Limited (“Dynasty”), which produces and sells winery products.
(d) Port services
The result of this segment is contributed by a listed associate of the Group, Tianjin Port
Development Holdings Limited (“Tianjin Port”), which provides port services in Tianjin.
(e) Elevators and escalators
The result of this segment is contributed by an associate of the Group, Otis Elevator (China)
Investment Company Limited (“Otis China”), which manufactures and sells elevators and
escalators.
Tianjin Development Holdings Limited | Interim Report 201215
Notes to the Condensed Consolidated Financial Statements 4. SEGMENT INFORMATION (Continued)
For the six months ended 30 June 2012
Utilities
(note (i)) Hotels Winery
Port
services
Elevators
and
escalators Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment revenue 1,863,450 55,056 — — — 1,918,506
Operating profit (loss) before
interest 381 (360) — — — 21
Interest income 17,220 9 — — — 17,229
Finance costs (14,294) — — — — (14,294)
Share of (loss) profit of associates — — (2,100) 77,899 181,583 257,382
Profit (loss) before tax 3,307 (351) (2,100) 77,899 181,583 260,338
Tax (expense) credit (23,117) — — — — (23,117)
Segment results
— (loss) profit for the period (19,810) (351) (2,100) 77,899 181,583 237,221
Non-controlling interests 1,716 3,552 — — (31,341) (26,073)
(Loss) profit attributable to owners
of the Company (18,094) 3,201 (2,100) 77,899 150,242 211,148
Segment results — (loss) profit for
the period includes:
Depreciation and amortization 32,131 14,403 — — — 46,534
Tianjin Development Holdings Limited | Interim Report 201216
Notes to the Condensed Consolidated Financial Statements 4. SEGMENT INFORMATION (Continued)
For the six months ended 30 June 2011
Utilities
(note (i)) Hotels Winery
Port
services
Elevators
and
escalators Total
HK$’000 HK$’000 HK$’000 HK$’000 HK$’000 HK$’000
Segment revenue 1,652,456 51,352 — — — 1,703,808
Operating profit (loss) before
interest 14,923 (3,860) — — — 11,063
Interest income 9,755 — — — — 9,755
Finance costs (4,430) — — — — (4,430)
Share of profit of associates — — 23,535 77,798 244,666 345,999
Profit (loss) before tax 20,248 (3,860) 23,535 77,798 244,666 362,387
Tax expense (8,936) (35,000) — — — (43,936)
Segment results
— profit (loss) for the period 11,312 (38,860) 23,535 77,798 244,666 318,451
Non-controlling interests (677) 3,385 — — (42,229) (39,521)
Profit (loss) attributable to owners
of the Company 10,635 (35,475) 23,535 77,798 202,437 278,930
Segment results — profit (loss) for
the period includes:
Depreciation and amortization 33,830 14,821 — — — 48,651
Tianjin Development Holdings Limited | Interim Report 201217
Notes to the Condensed Consolidated Financial Statements 4. SEGMENT INFORMATION (Continued)
Six months ended 30 June2012 2011
HK$’000 HK$’000
Reconciliation of profit for the period
Total reportable segments 237,221 318,451
Corporate and others (note (ii)) (10,429) (60,904)
Profit for the period 226,792 257,547
notes:
(i) The revenue in this segment was contributed by supply of electricity, water, and heat and thermal
power in the amount of approximately HK$1,127,900,000, HK$164,600,000 and HK$570,900,000
respectively (30 June 2011: approximately HK$993,800,000, HK$170,400,000 and HK$488,300,000
respectively).
The above revenue included accrued supplemental income (i.e. the Interim Accrual) of approximately
HK$109,823,000 (30 June 2011: approximately HK$131,088,000).
(ii) These principally include (a) results of the Group’s other businesses which are not categorized
as reportable segments; and (b) corporate level activities including central treasury management,
administrative function and exchange gain or loss.
Tianjin Development Holdings Limited | Interim Report 201218
Notes to the Condensed Consolidated Financial Statements 5. OTHER INCOME
Six months ended 30 June2012 2011
HK$’000 HK$’000
Interest income 67,554 41,399Rental income under operating leases net
of negligible outgoings 11,039 2,761
Sundries 1,586 3,240
80,179 47,400
6. OTHER GAINS, NETSix months ended 30 June
2012 2011HK$’000 HK$’000
Gain on change in fair value of investment properties 25,228 —Net gain on disposal of available-for-sale
financial assets 4,703 —
Net exchange gain 9,309 19,262Net (loss) gain on disposal of property, plant and
equipment (23) 124
Net gain (loss) on financial assets held for trading
— listed 3,309 (4,523)
— unlisted 12,343 12,009
Others — (2,881)
54,869 23,991
Tianjin Development Holdings Limited | Interim Report 201219
Notes to the Condensed Consolidated Financial Statements 7. TAX EXPENSE
Six months ended 30 June2012 2011
HK$’000 HK$’000
Current tax
PRC Enterprise Income Tax (“PRC EIT”) 31,094 13,063
Deferred tax 6,307 35,000
37,401 48,063
No provision for Hong Kong profits tax has been made as there was no estimated assessable
profit derived from Hong Kong during the current period (30 June 2011: Nil).
The Group’s PRC subsidiaries are subject to PRC EIT at 25%. Certain subsidiaries in the
utilities segment were subject to a preferential income tax rate in prior period, the tax rate
has been increased to 25% in 2012.
The deferred tax charge for the six months ended 30 June 2011 was mainly attributable
to a reversal of a deferred tax asset relating to tax losses that were recognized in prior
years. As a result of revised operating budgets, certain tax losses were no longer expected
to be utilized in the foreseeable future and accordingly, the related deferred tax asset was
reversed during the six months ended 30 June 2011.
8. PROFIT FOR THE PERIODSix months ended 30 June
2012 2011HK$’000 HK$’000
Profit for the period is arrived at after charging:
Employee benefit expense (including directors’ emoluments) 179,099 159,259
Purchase of electricity, water and steam for sale 1,569,791 1,381,998
Depreciation 48,268 47,113
Amortization of land use rights 3,500 3,537
Allowance for impairment of trade receivables 9,995 6,097
Operating lease expense on
— plants, pipelines and networks 76,458 73,075
— land and buildings 3,594 3,195
Tianjin Development Holdings Limited | Interim Report 201220
Notes to the Condensed Consolidated Financial Statements 9. EARNINGS PER SHARE
The calculation of the basic and diluted earnings per share is based on the profit attributable
to owners of the Company and the number of shares in issue as follows:
Six months ended 30 June2012 2011
HK$’000 HK$’000
Profit attributable to owners of the Company for
purpose of basic and diluted earnings per share 200,860 219,181
Number of shares Thousand Thousand
Number of ordinary shares for purpose of basic
earnings per share 1,067,470 1,067,470
Effect of dilutive potential ordinary shares: Options 1,386 445
Number of ordinary shares taking into account of share
options for purpose of diluted earnings per share 1,068,856 1,067,915
10. DIVIDENDS
The board does not recommend the payment of an interim dividend for the six months
ended 30 June 2012 (30 June 2011: Nil).
11. MOVEMENTS IN PROPERTY, PLANT AND EQUIPMENT AND INVESTMENT PROPERTIES
During the current period, the Group acquired property, plant and equipment of approximately
HK$141,578,000 (30 June 2011: approximately HK$138,539,000) for the purpose of
expanding the Group’s business. In addition, investment properties with an aggregate
carrying value of approximately HK$36,424,000 were transferred from other receivables as
the Group obtained the building certificates during the current period.
The fair value of the Group’s investment properties as at the end of the current period were
determined by the directors with reference to the market evidence of transaction price for
similar properties in the same location and condition. The increase in fair value of investment
properties of approximately HK$25,228,000 has been recognized directly in the condensed
consolidated income statement for the six months ended 30 June 2012 (30 June 2011:
Nil).
Tianjin Development Holdings Limited | Interim Report 201221
Notes to the Condensed Consolidated Financial Statements 12. INTEREST IN ASSOCIATES
30 June
2012
31 December
2011HK$’000 HK$’000
Group’s interest in associates
— Listed shares in Hong Kong
— Dynasty 895,947 901,151
— Tianjin Port 3,269,005 3,220,005— Unlisted shares in Tianjin Tianduan
Press Co. Ltd. 171,696 169,158
— Unlisted shares in Otis China 982,971 805,788
— Other unlisted shares 147,076 143,319
5,466,695 5,239,421
Market value of listed shares
— Dynasty 708,660 998,722
— Tianjin Port 1,163,862 1,319,044
Interest in associates at the end of the reporting period included goodwill of approximately
HK$1,136,300,000 (31 December 2011: approximately HK$1,137,888,000).
Tianjin Development Holdings Limited | Interim Report 201222
Notes to the Condensed Consolidated Financial Statements 13. AVAILABLE-FOR-SALE FINANCIAL ASSETS
30 June 2012
31 December 2011
notes HK$’000 HK$’000
Equity securities
Listed, at market value (a) 198,475 193,513
Unlisted (b) 15,008 52,073
213,483 245,586
Disclosure
Current assets — 36,991
Non-current assets 213,483 208,595
213,483 245,586
notes:
(a) The listed securities represent the Group’s 8.28% equity interest in Binhai Investment Company
Limited (“Binhai Investments”) which is listed on the Growth Enterprise Market of the Stock
Exchange.
As at 30 June 2012, the market value of the Group’s equity interest in Binhai Investment was
approximately HK$198,475,000 (31 December 2011: approximately HK$193,513,000) and the
unrealized fair value gain of approximately HK$4,962,000 (30 June 2011: loss of approximately
HK$34,733,000) was recognized in other comprehensive income.
(b) As at 30 June 2012, the unlisted available-for-sale financial assets are principally equity investments
in certain entities established and operating in the PRC. They are mainly denominated in Renminbi.
Tianjin Development Holdings Limited | Interim Report 201223
Notes to the Condensed Consolidated Financial Statements 14. TRADE AND OTHER RECEIVABLES
30 June
2012
31 December
2011HK$’000 HK$’000
Trade receivables — gross (note (i)) 718,935 733,807
Less: allowance for impairment (149,093) (139,808)
Trade receivables — net (note (ii)) 569,842 593,999
Other receivables, deposits and prepaymentsConsideration receivable for disposal of Jinzheng
(note (iii)) 122,699 123,305
Other receivables, deposits and prepayments 166,320 181,941
289,019 305,246
notes:
(i) Various group companies have different credit policies which are dependent on the practice of
the markets and the businesses in which they operate. In general, credit periods of 30 to 180
days are granted to corporate customers of the Group’s hotel business. No credit terms are
granted to customers in the utilities segment.
As at 30 June 2012, the supplemental income receivable from the TEDA Finance Bureau was
approximately HK$117,775,000 which included the accrued supplemental income as referred to
in Note 4(i) (31 December 2011: approximately HK$257,281,000). Annual supplemental income
receivable does not have credit terms and the amount is to be finalized by the TEDA Finance
Bureau after the end of each financial year. Continuous settlements have been received by the
Group in the past years.
Tianjin Development Holdings Limited | Interim Report 201224
Notes to the Condensed Consolidated Financial Statements 14. TRADE AND OTHER RECEIVABLES (Continued)
(ii) The ageing analysis of the Group’s trade receivables (net of allowance) is as follows:
30 June
2012
31 December
2011HK$’000 HK$’000
Within 30 days 496,241 411,525
31 to 90 days 34,119 20,082
91 to 180 days 16,016 26,082
Over 180 days 23,466 136,310
569,842 593,999
(iii) The amount represents the consideration receivable from the disposal of 83.9308% equity interest
in Tianjin Jinzheng Transportation Development Company Limited (“Jinzheng”) and it is expected
to be settled by the end of 2012.
15. FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS30 June
2012
31 December
2011HK$’000 HK$’000
Investment held for trading
Listed shares in Hong Kong 5,359 5,359
Listed shares in the PRC 40,745 56,234
Unlisted funds in the PRC 17,941 277,115
Others 5,644 —
69,689 338,708
During the current period, the Group had net cash inflow from investments held for trading
of approximately HK$283,692,000 (30 June 2011: HK$33,075,000).
Tianjin Development Holdings Limited | Interim Report 201225
Notes to the Condensed Consolidated Financial Statements 16. ENTRUSTED DEPOSITS
For the period ended 30 June 2012, the Group placed in, and withdrew from, two PRC
financial institutions entrusted deposits of approximately HK$1,409,000,000 and
HK$1,186,000,000 respectively (30 June 2011: approximately HK$1,429,000,000 and
HK$351,000,000 respectively). The deposits with maturity from 1 to 12 months after the
end of the reporting period (31 December 2011: 2 to 16 months) carried fixed rates of
return ranging from 6.1% to 10.0% (31 December 2011: 6.1% to 8.4%) per annum.
17. BANK BORROWINGS
During the current period, the Group obtained new bank borrowings of approximately
HK$147,601,000 (30 June 2011: Nil) and repaid bank borrowings of approximately
HK$110,701,000 (30 June 2011: Nil).
At the end of the reporting period, the bank borrowings carried interest at rates ranging
from 1.80% to 7.33% (31 December 2011: 1.70% to 7.54%) per annum.
18. TRADE PAYABLES
The ageing analysis of the Group’s trade payables, based on invoice date, is as follows:
30 June
2012
31 December
2011HK$’000 HK$’000
Within 30 days 62,240 22,720
31 to 90 days 220,402 248,961
91 to 180 days 98,406 —
Over 180 days 68,120 107,354
449,168 379,035
Tianjin Development Holdings Limited | Interim Report 201226
Notes to the Condensed Consolidated Financial Statements 19. CAPITAL COMMITMENTS
30 June
2012
31 December
2011HK$’000 HK$’000
Authorized but not contracted for in respect of
— Acquisition of an associate 15,897 —
— Improvements on plant and machinery 1,077,948 825,098
1,093,845 825,098
Contracted but not provided for in respect of
— Property, plant and machinery 161,340 152,728
— Capital injection in an associate 189,755 190,691
— Capital injection in jointly controlled entities 12,394 17,387
363,489 360,806
20. RELATED PARTY DISCLOSURES
The Group is controlled by Tsinlien Group Company Limited (“Tsinlien”), a company
incorporated in Hong Kong, which owns approximately 57.08% of the Company’s shares
as at 30 June 2012. The remaining 42.92% of the Company’s shares are widely held.
Tsinlien is a state-owned enterprise and is controlled by Tianjin Municipal Government of
PRC. In accordance with HKAS 24 (Revised) Related Party Disclosures, entities directly or
indirectly controlled, jointly controlled or significantly influenced by the PRC government are
defined as related parties of the Group. On that basis, related parties include Tsinlien, its
subsidiaries and associates, other state-owned enterprises and their subsidiaries directly or
indirectly controlled by the PRC government, and other entities and corporations in which
the Company is able to control or exercise significant influence, and key management
personnel of the Company and Tsinlien as well as their close family members.
During the current period, except for the Interim Accrual, the Group’s significant transactions
with entities that are controlled, jointly controlled or significantly influenced by the PRC
government, mainly include majority of its bank transactions, part of sales of goods and
services and majority of purchases of goods and services (such as sale and purchase of
utilities including electricity and water). The price and other terms of such transactions are
set out in the agreements governing these transactions or as mutually agreed, as
appropriate.
Tianjin Development Holdings Limited | Interim Report 201227
Notes to the Condensed Consolidated Financial Statements 20. RELATED PARTY DISCLOSURES (Continued)
Apart from the above-mentioned transactions with the government-related entities and the
related party transactions and balances set out elsewhere in these condensed consolidated
financial statements, the following is a summary of the significant related party transactions
and balances arising in the normal course of the Group’s business:
(I) Related party transactions
(a) Transactions with related parties of the Group (note)
Six months ended 30 June2012 2011
HK$’000 HK$’000
Operating lease expenses for land 947 688Operating lease expenses for plants,
pipelines and networks 76,458 73,075
Purchase of steam for sale 499,521 433,190
note: The related parties are entities controlled by non-controlling interests of the
Company’s non-wholly owned subsidiaries.
(b) Key management compensation
Six months ended 30 June2012 2011
HK$’000 HK$’000
Fees 890 890
Salaries and other emoluments 4,374 4,011
5,264 4,901
(II) Related party balances
Details of the Group’s outstanding balances with related parties are set out in the
condensed consolidated balance sheet.
Tianjin Development Holdings Limited | Interim Report 201228
Management Discussion and AnalysisBUSINESS REVIEW
Utilities
The Group’s utility businesses are mainly operating in the Tianjin Economic and Technological
Development Area (“TEDA”) through supplying electricity, water, heat and thermal power to
industrial, commercial and residential customers.
TEDA is a national development zone and ranked no. 1 in terms of overall capabilities in the PRC.
Situated at the centre of Bohai economic rim, TEDA is an ideal place for manufacturing and R&D
developments.
Electricity
Tianjin TEDA Tsinlien Electric Power Co., Ltd. (“Electricity Company”) is principally engaged in
supply of electricity in TEDA. It also provides services in relation to maintenance of power supply
equipment and technical consultancy. Currently, the installed transmission capacity of the Electricity
Company is approximately 706,000 kVA.
For the six months ended 30 June 2012, the Electricity Company reported revenue of approximately
HK$1,128 million and profit of approximately HK$10.2 million, representing an increase of 13.5%
and 8.5% respectively over the corresponding period of last year. The rise in profit was mainly due
to the growth of revenue. The total quantity of electricity sold during the period was approximately
1,319,510,000 kWh, representing an increase of 5.5% over the same period of last year.
Water
Tianjin TEDA Tsinlien Water Supply Co., Ltd. (“Water Company”) is principally engaged in supply
of tap water in TEDA. It also provides services in installation and maintenance of water pipes,
technical consultancy, retail and wholesale of water pipes and related parts. The daily supply
capacity of the Water Company is approximately 400,000 tonnes.
For the period under review, the Water Company reported revenue of approximately HK$164.6
million, representing a decrease of 3.4% over the same period of last year, and loss of approximately
HK$26.7 million was recorded compared to a profit of approximately HK$1.7 million for the same
period of last year. The loss for the period was mainly due to the decrease of provision of
supplemental income and the increase of provision of repair expenses for prior years. The total
quantity of water sold for the period was approximately 23,548,000 tonnes, representing an increase
of 0.3% over the same period of last year.
Tianjin Development Holdings Limited | Interim Report 201229
Management Discussion and AnalysisHeat and Thermal Power
Tianjin TEDA Tsinlien Heat & Power Co., Ltd. (“Heat & Power Company”) is principally engaged in
distribution of steam and heat for industrial, commercial and residential customers within TEDA.
The Heat & Power Company has steam transmission pipelines of approximately 360 kilometres
and more than 105 processing stations in TEDA. The daily distribution capacity is approximately
30,000 tonnes of steam.
For the period under review, the Heat & Power Company reported revenue of approximately
HK$570.9 million, representing an increase of 17% over the same period of last year. A loss of
approximately HK$3.3 million was recorded compared to a profit of approximately HK$0.2 million
for the same period of last year. The loss for the current period was mainly due to the decrease
of provision of supplemental income. The total quantity of steam sold for the period was
approximately 2,408,000 tonnes, representing an increase of 7.7% over the same period of last
year.
Hotels
Courtyard by Marriott Hong Kong
Courtyard by Marriott Hong Kong (“Courtyard Hotel”), situated in a prime location on the Hong
Kong Island, is a 4-star hotel with 245 guest rooms. It is positioned as an ideal lodge for business
and leisure travellers.
For the six months ended 30 June 2012, Courtyard Hotel’s revenue increased by 7% to
approximately HK$54.6 million and a profit of approximately HK$11.7 million was recorded
compared to a loss of approximately HK$26.8 million for the same period of last year. The room
rate has improved and has offset the impact of drop in occupancy rate. During the period under
review, the average occupancy rate was approximately 80.4% compared to 84% of the same
period of last year.
Hotel Property in Tianjin
As disclosed in the last annual report, the Group intended to retain the hotel property in Tianjin
for future development. In April 2012, Tianjin First Hotel Ltd., a 75% owned subsidiary of the
Company, has reached an agreement with Hyatt of China Limited to terminate the management
contract for the operation of Hyatt Regency Tianjin Hotel. Currently, the Group is at a stage of
considering various redevelopment plans. During the period under review, a loss of approximately
HK$12 million was recorded.
Tianjin Development Holdings Limited | Interim Report 201230
Management Discussion and AnalysisStrategic and Other Investments
Winery
During the period under review, the revenue of Dynasty Fine Wines Group Limited (“Dynasty”) (stock
code: 828) decreased by 30% to approximately HK$556 million and loss attributable to owners of
Dynasty was approximately HK$4.7 million. Sales volume declined by 45% to 16.9 million bottles.
Red wine accounted for approximately 85% of total sales. The loss was mainly due to a decrease
in sales volume as a result of (i) the impact of reform on the sales and distribution model; and (ii)
weaker demand of domestic wine products. The Group shared a loss from Dynasty of approximately
HK$2.1 million while a profit of approximately HK$23.5 million was contributed to the Group in the
same period of last year.
Port Services
During the period under review, the revenue of Tianjin Port Development Holdings Limited (“Tianjin
Port”) (stock code: 3382) increased by 6.8% to approximately HK$8,014.8 million and profit
attributable to owners of Tianjin Port was approximately HK$370.9 million, representing an increase
of 0.1% over the same period of last year. The good performance was mainly attributable to the
steady growth of the overall throughput, including cargo and containers. The expanded operating
scale and the complementary business structure have strengthened its competitiveness and
demonstrated its advantages.
Tianjin Port contributed to the Group a profit of approximately HK$77.9 million, representing an
increase of 0.1% compared to that of last year.
Elevators and Escalators
During the period under review, the revenue of Otis Elevator (China) Investment Company Limited
(“Otis China”) amounted to approximately HK$7,248 million, representing a decrease of 8% over
the same period of last year.
Otis China contributed to the Group a profit (after non-controlling interests) of approximately
HK$150.2 million, representing a decrease of 26% over the same period in 2011.
Investment in Binhai Investment Company Limited
During the period under review, the Group had 8.28% interest in Binhai Investment Company
Limited (“Binhai Investment”) (stock code: 8035). As at 30 June 2012, the market value of the
Group’s interest in Binhai Investment amounted to approximately HK$198.4 million (31 December
2011: approximately HK$193.5 million) and the unrealized fair value gain of approximately HK$4.9
million was recognized in other comprehensive income.
Tianjin Development Holdings Limited | Interim Report 201231
Management Discussion and AnalysisPROSPECT
It is anticipated that global economic and political situations will remain volatile in the second half
year as various uncertainties stemming from the Eurozone debt crisis may occur, and the U.S.
economic recovery is slow. Thus China’s economic performance will be inevitably affected by those
external factors. Nonetheless, the Group will continue to seize the opportunities and to actively
prepare and participate in the overall planning of the state-owned assets in Tianjin City, to orderly
carry out various projects and retain healthy growth of all businesses. In the face of numerous
challenges and competition, the Group has been well prepared with strong financial position and
has sufficient resources to develop our businesses. We are confident in the future of the Group.
LIQUIDITY AND CAPITAL RESOURCES ANALYSIS
As at 30 June 2012, the Group’s total cash on hand and total bank borrowings stood at
approximately HK$3,795 million and approximately HK$2,388 million respectively (31 December
2011: approximately HK$3,763 million and approximately HK$2,350 million respectively). The bank
borrowings of approximately HK$397.5 million (31 December 2011: approximately HK$362.5 million)
will mature within one year.
The gearing ratio as measured by total borrowings to shareholders’ funds was at approximately
24% as at 30 June 2012 (31 December 2011: approximately 24%).
Of the total HK$2,388 million bank borrowings outstanding as at 30 June 2012, HK$1,990.5 million
were subject to floating rates with a spread of 1.4% over HIBOR of relevant interest periods and
RMB80 million (equivalent to approximately HK$98 million) were calculated at the 10 basis points
over benchmark rate of the People’s Bank of China. The remaining RMB244 million (equivalent to
approximately HK$299.5 million) of bank borrowings were fixed-rate debts with annual interest rates
at 5.31% to 7.54%.
As at 30 June 2012, 83% (31 December 2011: 85%) of the Group’s total bank borrowings was
denominated in HK dollars, 17% (31 December 2011: 15%) was denominated in Renminbi.
For the period under review, the Group has not entered into any derivative contracts or hedging
transactions.
Tianjin Development Holdings Limited | Interim Report 201232
Management Discussion and AnalysisEMPLOYEES AND REMUNERATION POLICIES
During the period under review, the Group had a total of approximately 1,000 employees, of whom
approximately 190 were management personnel and 400 were technical staff, with the balance
being production workers.
The Group contributes to an employee pension scheme established by the PRC Government which
undertakes to assume the retirement benefit obligations of all existing and future retired employees
of the Group in the PRC. The Group also contributes to a mandatory provident fund scheme for
its Hong Kong employees. The contributions are based on a fixed percentage of the members’
salaries.
CHARGE ON ASSETS
As at 30 June 2012, a restricted bank balance of approximately HK$7.7 million was pledged against
notes payable of approximately HK$25.8 million.
Tianjin Development Holdings Limited | Interim Report 201233
Other InformationDIRECTORS’ INTERESTS IN SHARES
As at 30 June 2012, the interests or short positions of the directors and chief executive of the
Company in the shares, underlying shares and debentures of the Company or any of its associated
corporations (within the meaning of Part XV of the Securities and Futures Ordinance (the “SFO”))
as recorded in the register required to be kept under section 352 of the SFO; or as otherwise
notified to the Company and the Stock Exchange pursuant to the Model Code for Securities
Transactions by Directors of Listed Issuers (the “Model Code”), were as follows:
(i) Interests in the underlying shares of the Company
Name of director
Number of underlying
shares held
Approximate percentage of
interests to the issued
share capital
Mr. Yu Rumin 3,800,000 0.36%Mr. Wu Xuemin 5,000,000 0.47%Mr. Dai Yan 5,300,000 0.50%Mr. Bai Zhisheng 1,100,000 0.10%Mr. Zhang Wenli 1,100,000 0.10%Mr. Wang Zhiyong 3,700,000 0.35%Mr. Cheung Wing Yui, Edward 900,000 0.08%Dr. Chan Ching Har, Eliza 400,000 0.04%Dr. Cheng Hon Kwan 900,000 0.08%Mr. Mak Kwai Wing, Alexander 400,000 0.04%Ms. Ng Yi Kum, Estella 400,000 0.04%
notes:
1. All interests are held in the capacity as a beneficial owner.
2. All interests stated above represent long positions.
3. Details of the interests of directors in share options are set out in the paragraph headed “Share
Option Scheme” in this section below.
Tianjin Development Holdings Limited | Interim Report 201234
Other InformationDIRECTORS’ INTERESTS IN SHARES (Continued)
(ii) Interests in shares of associated corporation of the Company
Name of director
Name of
associated
corporation
Nature of
interests Capacity
Number of
shares held
Approximate
percentage of
interests to the
issued share
capital
Mr. Wu Xuemin Tianjin Port Family interest Interest of spouse 10,000 0.00%
(iii) Interests in the underlying shares of associated corporations of the Company
Name of director
Name of
associated
corporation
Nature of
interests Capacity
Number of
underlying
shares held
Approximate
percentage of
interests to the
issued share
capital
Mr. Yu Rumin Tianjin Port Personal interest Beneficial owner 3,450,000 0.06%
Mr. Dai Yan Tianjin Port Personal interest Beneficial owner 1,650,000 0.03%
Mr. Bai Zhisheng Dynasty Personal interest Beneficial owner 2,300,000 0.18%
Save as disclosed above, as at 30 June 2012, none of the directors or chief executive or their
respective associates had any interests or short positions in the shares, underlying shares and
debentures of the Company or any of its associated corporations (within the meaning of Part XV
of the SFO) as recorded in the register required to be kept under section 352 of the SFO; or as
otherwise notified to the Company and the Stock Exchange pursuant to the Model Code.
Tianjin Development Holdings Limited | Interim Report 201235
Other InformationSHARE OPTION SCHEME
At the annual general meeting of the Company held on 25 May 2007, a share option scheme (the
“Share Option Scheme”) of the Company was approved by shareholders of the Company.
Details of options granted, exercised, lapsed or cancelled and outstanding under the Share Option
Scheme during the period were as follows:
Number of share options
Date of Grant
Exercise Price
per share
As at 1 January
2012
During the period As at 30 June
2012 Exercise PeriodGranted Exercised Lapsed CancelledHK$
Directors
Yu Rumin 19/12/2007 8.04 1,000,000 — — — — 1,000,000 17/01/2008–24/05/201716/12/2009 5.75 2,000,000 — — — — 2,000,000 16/12/2009–24/05/201707/11/2011 3.56 800,000 — — — — 800,000 11/11/2011–24/05/2017
Wu Xuemin 16/12/2009 5.75 1,800,000 — — — — 1,800,000 16/12/2009–24/05/201707/11/2011 3.56 3,200,000 — — — — 3,200,000 11/11/2011–24/05/2017
Dai Yan 19/12/2007 8.04 900,000 — — — — 900,000 17/01/2008–24/05/201716/12/2009 5.75 1,400,000 — — — — 1,400,000 16/12/2009–24/05/201707/11/2011 3.56 3,000,000 — — — — 3,000,000 11/11/2011–24/05/2017
Bai Zhisheng 19/12/2007 8.04 300,000 — — — — 300,000 17/01/2008–24/05/201716/12/2009 5.75 500,000 — — — — 500,000 16/12/2009–24/05/201707/11/2011 3.56 300,000 — — — — 300,000 11/11/2011–24/05/2017
Zhang Wenli 19/12/2007 8.04 300,000 — — — — 300,000 17/01/2008–24/05/201716/12/2009 5.75 500,000 — — — — 500,000 16/12/2009–24/05/201707/11/2011 3.56 300,000 — — — — 300,000 11/11/2011–24/05/2017
Wang Zhiyong 16/12/2009 5.75 900,000 — — — — 900,000 16/12/2009–24/05/201707/11/2011 3.56 2,800,000 — — — — 2,800,000 11/11/2011–24/05/2017
Cheung Wing Yui, Edward 19/12/2007 8.04 500,000 — — — — 500,000 17/01/2008–24/05/201716/12/2009 5.75 300,000 — — — — 300,000 16/12/2009–24/05/201707/11/2011 3.56 100,000 — — — — 100,000 11/11/2011–24/05/2017
Chan Ching Har, Eliza 16/12/2009 5.75 300,000 — — — — 300,000 16/12/2009–24/05/201707/11/2011 3.56 100,000 — — — — 100,000 11/11/2011–24/05/2017
Cheng Hon Kwan 19/12/2007 8.04 500,000 — — — — 500,000 17/01/2008–24/05/201716/12/2009 5.75 300,000 — — — — 300,000 16/12/2009–24/05/201707/11/2011 3.56 100,000 — — — — 100,000 11/11/2011–24/05/2017
Mak Kwai Wing, Alexander 16/12/2009 5.75 300,000 — — — — 300,000 16/12/2009–24/05/201707/11/2011 3.56 100,000 — — — — 100,000 11/11/2011–24/05/2017
Ng Yi Kum, Estella 03/12/2010 6.07 300,000 — — — — 300,000 03/12/2010–24/05/201707/11/2011 3.56 100,000 — — — — 100,000 11/11/2011–24/05/2017
Gong Jing (note 1) 16/12/2009 5.75 500,000 — — — — 500,000 16/12/2009–24/05/201707/11/2011 3.56 300,000 — — — — 300,000 11/11/2011–24/05/2017
Wang Jiandong (note 2) 19/12/2007 8.04 600,000 — — 600,000 — — 17/01/2008–24/05/201716/12/2009 5.75 900,000 — — 900,000 — — 16/12/2009–24/05/201707/11/2011 3.56 300,000 — — 300,000 — — 11/11/2011–24/05/2017
Sun Zengyin (note 2) 19/12/2007 8.04 300,000 — — 300,000 — — 17/01/2008–24/05/201716/12/2009 5.75 500,000 — — 500,000 — — 16/12/2009–24/05/201707/11/2011 3.56 300,000 — — 300,000 — — 11/11/2011–24/05/2017
Continuous contract 16/12/2009 5.75 900,000 — — — — 900,000 16/12/2009–24/05/2017employees 07/11/2011 3.56 5,000,000 — — — — 5,000,000 11/11/2011–24/05/2017
Total 32,600,000 — — 2,900,000 — 29,700,000
Tianjin Development Holdings Limited | Interim Report 201236
Other InformationSHARE OPTION SCHEME (Continued)
notes:
1. The share options of Dr. Gong Jing will lapse on 31 August 2012 due to his retirement on 31 May 2012.
2. The share options of Dr. Wang Jiandong and Mr. Sun Zengyin lapsed on 31 March 2012 due to their
resignation as directors of the Company on 31 December 2011.
3. No share options had been granted under the Share Option Scheme during the six months ended 30 June
2012.
DIRECTORS’ RIGHT TO ACQUIRE SHARES OR DEBENTURES
Apart from the Share Option Scheme of the Company, at no time during the period was the
Company or any of its subsidiaries a party to any arrangements to enable the directors of the
Company to acquire benefits by means of the acquisition of shares in, or debentures of, the
Company or any other body corporate.
SUBSTANTIAL SHAREHOLDERS
As at 30 June 2012, the following persons or corporations, other than the directors or chief
executive of the Company as disclosed above, had interests or short positions in the shares or
underlying shares of the Company as recorded in the register required to be kept under section
336 of the SFO:
Name of shareholder notes CapacityNumber of
shares held
Approximate percentage of
interests to the issued
share capital
Tsinlien 1 Interest of controlled corporation 609,269,143 (L) 57.08%2 Interest of controlled corporation 220,298,109 (S) 20.64%
Blackrock, Inc. 3 Interest of controlled corporation 142,273,393 (L) 13.32%Interest of controlled corporation 218,403 (S) 0.02%
Humphreys Estate (Strawberry Houses) Limited (“Humphreys Estate”)
4 Directly beneficially owned 53,426,000 (L) 5.00%
Tomson Group Limited (“Tomson Group”) 5 Interest of controlled corporation 53,426,000 (L) 5.00%
Ms. Hsu Feng 5 Interest of controlled corporation 53,426,000 (L) 5.00%
Mr. Albert Tong 5 Interest of controlled corporation 53,426,000 (L) 5.00%
Mr. Tong Chi Kar, Charles 5 Interest of controlled corporation 53,426,000 (L) 5.00%
“L” denotes a long position in shares
“S” denotes a short position in shares
Tianjin Development Holdings Limited | Interim Report 201237
Other InformationSUBSTANTIAL SHAREHOLDERS (Continued)
notes:
1. As at 30 June 2012, Tsinlien directly held 5,864,000 shares and its wholly-owned subsidiaries, namely Tianjin
Investment Holdings Limited (“Tianjin Investment”), Tsinlien Venture Capital Company Limited (“Tsinlien Venture
Capital”) and Tsinlien Investment Limited (“Tsinlien Investment”) held 568,017,143 shares, 2,022,000 shares
and 33,366,000 shares respectively. By virtue of the SFO, Tsinlien is therefore deemed to have an interest
in the shares in which Tianjin Investment, Tsinlien Venture Capital and Tsinlien Investment are interested.
2. Tsinlien is deemed to have a short position of 220,298,109 shares of the Company, whereby Bright North
Limited, a wholly-owned subsidiary of Tsinlien, has issued an aggregate of RMB1,638,000,000 U.S. Dollar
Settled 1.25 per cent. Guaranteed Exchangeable Bonds due 2016 guaranteed by Tsinlien and exchangeable
into ordinary shares of the Company at an exchangeable price of HK$8.831 per share.
3. Based on a corporate substantial shareholder notice, Blackrock, Inc. held a long position of 143,406,283
shares and a short position of 212,384 shares of the Company as at 22 August 2012.
4. Based on a corporate substantial shareholder notice, Humphreys Estate is an indirect wholly-owned subsidiary
of Tomson Group. By virtue of the SFO, Tomson Group is deemed to have an interest in the shares in which
Humphreys Estate is interested.
5. Ms. Hsu Feng, Mr. Albert Tong and Mr. Tong Chi Kar, Charles are the substantial shareholders of Tomson
Group. By virtue of the SFO, they are deemed to have an interest in the shares in which Tomson Group is
interested.
Save as disclosed above, as at 30 June 2012, the Company had not been notified by any person
or corporation, other than the directors or chief executive of the Company, who had interests or
short positions in the shares and underlying shares of the Company as recorded in the register
required to be kept under section 336 of the SFO.
Tianjin Development Holdings Limited | Interim Report 201238
Other InformationCORPORATE GOVERNANCE
The Company has complied with the code provisions as set out in the Code on Corporate
Governance Practices (effective until 31 March 2012) and the Corporate Governance Code (the
“New CG Code”) (effective from 1 April 2012) contained in Appendix 14 of the Rules Governing
the Listing of Securities on the Stock Exchange (the “Listing Rules”) throughout the six months
ended 30 June 2012, except for the deviation from code provision D.1.4 of the New CG Code,
which stipulates that there should be formal letters of appointment for directors setting out the key
terms and conditions of their appointment.
At present, executive directors of the Company (save for the Chairman of the Board, who has a
service agreement with the Company) do not have formal letters of appointment but are subject
to retirement by rotation at least once every three years in accordance with the articles of
association of the Company. Nevertheless, the Board gives clear directions to the directors at the
time of delegation, in particular, to the matters that must be approved by the Board before making
decisions or entering into any commitments on behalf of the Company. Moreover, directors are
required to comply with all applicable laws and regulations as well as the Company’s administration
policies and procedures in performing their duties and responsibilities.
During the period under review, the Board has revised the terms of reference of the Board
committees in order to align with the New CG Code. Corporate governance guidelines have been
adopted pursuant to which the Board is directly responsible for performing the corporate
governance duties.
The Board will continue to monitor and review the Company’s corporate governance practices and
procedures and make necessary changes when it considers appropriate.
COMPLIANCE WITH THE MODEL CODE
The Company has adopted the Model Code as set out in Appendix 10 of the Listing Rules as its
own code of conduct for directors’ securities transactions. Having made specific enquiry, all the
directors have confirmed that they have complied with the required standard as set out in the
Model Code throughout the six months ended 30 June 2012.
The Company has also established written guidelines regarding securities transaction on no less
exacting terms than the Model Code for senior management and specific individuals who may have
access to price sensitive information in relation to the securities of the Company.
Tianjin Development Holdings Limited | Interim Report 201239
Other InformationREVIEW BY AUDIT COMMITTEE
At the request of the Audit Committee of the Company, the Group’s independent auditor has
carried out a review of the unaudited condensed consolidated financial statements in accordance
with Hong Kong Standard on Review Engagements 2410, “Review of Interim Financial Information
Performed by the Independent Auditor of the Entity” issued by the HKICPA. The Audit Committee
had reviewed with management the accounting principles and practices adopted by the Group
and discussed auditing and financial reporting matters including the review of unaudited condensed
consolidated financial statements for the six months ended 30 June 2012.
The Audit Committee consists of Dr. Cheng Hon Kwan, Mr. Mak Kwai Wing, Alexander and Ms.
Ng Yi Kum, Estella who is the Chairman of the Committee.
DISCLOSURE PURSUANT TO RULE 13.18 OF THE LISTING RULES
On 18 February 2011, the Company entered into a facility agreement (the “Facility Agreement”)
with a syndicate of banks (the “Banks”) in respect of a HK$2,000 million term loan facility for a
period up to 60 months unless not extended by the Banks at the 36th month from the date of
the Facility Agreement.
Pursuant to the Facility Agreement, it will be an event of default, inter alia, if (i) the Tianjin Municipal
People’s Government ceases to maintain a shareholding ownership directly or indirectly in the
Company of more than 50%, or (ii) the Company ceases to be under the direct or indirect
management control of Tsinlien.
If any of the abovementioned events of default occurs, the Banks may by notice to the Company
(a) cancel the total commitments; (b) declare that the loan together with accrued interest, and all
other amounts accrued or outstanding be immediately due and payable; and/or (c) declare that
the loan be repayable on demand.
Tianjin Development Holdings Limited | Interim Report 201240
Other InformationINTERIM DIVIDEND
The Board does not recommend the payment of an interim dividend for the six months ended 30
June 2012 (30 June 2011: Nil).
PURCHASE, SALE OR REDEMPTION OF SHARES
Neither the Company nor any of its subsidiaries had purchased, sold or redeemed any of the
Company’s shares during the six months ended 30 June 2012.
By Order of the Board
Yu Rumin
Chairman
Hong Kong, 30 August 2012
Tianjin Development Holdings Limited | Interim Report 201241
Report on Review of Condensed Consolidated Financial Statements
TO THE BOARD OF DIRECTORS OF
TIANJIN DEVELOPMENT HOLDINGS LIMITED
(incorporated in Hong Kong with limited liability)
INTRODUCTION
We have reviewed the condensed consolidated financial statements of Tianjin Development Holdings
Limited (the “Company”) and its subsidiaries (collectively referred to as the “Group”) set out on
pages 5 to 27, which comprise the condensed consolidated balance sheet as of 30 June 2012
and the related condensed consolidated income statement, statement of comprehensive income,
statement of changes in equity and statement of cash flows for the six-month period then ended,
and certain explanatory notes. The Main Board Listing Rules Governing the Listing of Securities
on The Stock Exchange of Hong Kong Limited require the preparation of a report on interim
financial information to be in compliance with the relevant provisions thereof and Hong Kong
Accounting Standard 34 “Interim Financial Reporting” (“HKAS 34”) issued by the Hong Kong
Institute of Certified Public Accountants. The directors of the Company are responsible for the
preparation and presentation of these condensed consolidated financial statements in accordance
with HKAS 34. Our responsibility is to express a conclusion on these condensed consolidated
financial statements based on our review, and to report our conclusion solely to you, as a body,
in accordance with our agreed terms of engagement, and for no other purpose. We do not assume
responsibility towards or accept liability to any other person for the contents of this report.
SCOPE OF REVIEW
We conducted our review in accordance with Hong Kong Standard on Review Engagements 2410
“Review of Interim Financial Information Performed by the Independent Auditor of the Entity” issued
by the Hong Kong Institute of Certified Public Accountants. A review of these condensed
consolidated financial statements consists of making inquiries, primarily of persons responsible for
financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with Hong Kong Standards on
Auditing and consequently does not enable us to obtain assurance that we would become aware
of all significant matters that might be identified in an audit. Accordingly we do not express an
audit opinion.
Tianjin Development Holdings Limited | Interim Report 201242
Report on Review of Condensed Consolidated Financial StatementsCONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the
condensed consolidated financial statements are not prepared, in all material respects, in
accordance with HKAS 34.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong
30 August 2012